SMEs should insure their businesses against riots
Given the increasing incidences of protest actions ahead of the national elections in May, SMEs should ensure they are adequately insured against riots, strikes or protest actions.
The South African Special Risk Insurance Association (Sasria), a short-term insurer that provides special risk cover to consumers and businesses, reported that losses resulting from service delivery protests amounted close to R1 billion between April 2018 and January this year.
Malesela Maupa, Head of Insurer Relationships at FNB Insurance Brokers said that this provides a compelling reason for SMEs operating in South Africa to ensure that they are covered against civil commotion, public disorder, strikes, riots and various acts of terrorism through Sasria.
Maupa unpacks key questions SMEs often ask about Sasria cover:
Is Sasria cover compulsory?
SASRIA cover is not compulsory, SMEs can opt out of Sasria. However, it is highly recommended for all businesses given the increasing rate of civil unrest in the country. Sasria cover is often automatically included as part of a business short-term insurance policy. However, some insurers offer it as optional cover.
How much do premium costs?
Premiums are very affordable and cover is easily accessible to consumers or by every business no matter the level of turnover. The premiums are charged at marginal standard rates across the various classes of cover irrespective of geographical area, industry or sector.
What is the maximum cover amount?
All businesses are covered for R500 million in the annual aggregate during any period of insurance cover. An additional cover for R1 billion is available upon request at an additional premium, for large corporates.
What is covered in the policy and are there any exclusions?
Only incidents or risks that are related to riots, strikes, public unrest or protest actions are covered by Sasria. There are certain exclusions for risks resulting from acts of terrorism that involve, nuclear weapons, chemical or biological agents.
How do you claim from Sasria?
The claim has to be reported to your insurer or broker and then escalated to Sasria. Following that process, the business would then communicate directly with Sasria in terms of appointing assessors and settlement of the claim.
Do I need to pay an excess?
No excess is payable on all valid Sasria material damage claims except for plant risks where the insured will be responsible for the first R1 000 for each and every plant claim.
“Material damage and looting related risks resulting from service delivery protests could significantly set back a business that is not adequately insured. SMEs are, therefore, advised to thoroughly review their insurance policies to ensure that their policies include Sasria cover,” concludes Maupa.